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Japan's Nikkei surges 9 percent on relief after Trump pauses tariffs

Published: 10 Apr. 2025, 20:18

A man walks past an electronic board showing the closing numbers of the Nikkei Stock Average on the Tokyo Stock Exchange in Tokyo on April 10. [AFP/YONHAP]

Japan's Nikkei 225 index share average jumped 9 percent on Thursday as investors scooped up beaten-down stocks after U.S. President Donald Trump declared an immediate 90-day tariff pause for many countries.

The Nikkei rose 9.13 percent to 34,609 in its biggest daily gain since August 6, the day after the index fell in its biggest single-day rout since the “Black Monday” of 1987.

The broader Topix index climbed 8.09 percent to 2,539.4.

“Investors bought back stocks today, wishing that they had not dumped stocks in the previous session,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

“But the rally also means that the market was too bearish about the impact of Trump's tariffs,” Suzuki said.

In a stunning reversal, Trump said on Wednesday he would temporarily lower the hefty duties he had just imposed on dozens of countries while further ramping up pressure on China, sending U.S. stocks rocketing.

The Nikkei saw huge volatility this week, closing 6 percent higher on Tuesday after a 7.8 percent slump on Monday to a one-to-half-year low. The index closed 4 percent lower on Wednesday.

A passerby is reflected on a stock market and foreign currency indicator board in Tokyo on April 10. [EPA/YONHAP]

Thursday's rally followed surges on Wall Street overnight, with the S&P 500 soaring 9.5 percent for its biggest daily gain since 2008.

Uniqlo owner Fast Retailing jumped 9 percent, providing the biggest boost to the index. Chip-related shares surged, with Tokyo Electron and Advantest Corporation advancing 12.89 percent and 13.74 percent, respectively.

All of the Tokyo Stock Exchange's (TSE) 33 industry subindexes rose, with the nonferrous sector rising 13.42 percent to become the top gainer.

The banking sector, which was hit hard by worries about the economic slowdown, rose 8.51 percent.

Morgan Stanley analysts said Trump's decision is bullish for Asia equities and most bullish for Japan equities.

That is because Japan “has a strong underlying reflationary dynamic but came closest in our coverage to pricing in such a recession at the lows on Monday,” Morgan Stanley said in a note.

All but one of the 225 stocks on the Nikkei rose. Of more than 1,600 stocks trading on the TSE's prime market, 99 percent of the shares rose.

Reuters